African Agriculture Fund Designates $135M To Expand Food Production

Nov 30, 2010

The African Agriculture Fund (AAF) announced Monday that it has designated $135 million for expanded food production, agricultural processing and distribution, especially for small holder farms, PANA/Afrique en ligne reports.

AAF “aims to support private sector companies that implement strategies to enhance and diversify food production and distribution in Africa by providing equity funding including strengthening the management and modernization of the agricultural sector on the continent,” the news service writes (11/30). In a press release, AAF said it would “make investments of up to USD20m per portfolio company, targeting entities with robust management and growth prospects. The fund aims to support private sector companies that implement strategies to enhance and diversify food production and distribution in Africa by providing equity funding including strengthening the management and modernisation of the agricultural sector on the continent.”

AAF, which has a total target size of $300 million,Â is “a private equity fund designed to respond to the food crisis that severely impacted [Africa] in 2008 in the wake of escalating food prices,” according to the release. The fund receives support from the Agence Francaise de Developpement, the Spanish Agency for International Development Cooperation, Promotion et Participation pour la Cooperation economique and International Fund for Agricultural Development, and several African financial institutions, including the African Development Bank, the Development Bank of Southern Africa, the West African Development Bank and the ECOWAS Bank of Investment and Development, “as limited liability partner investors,”Â the release states.

“With food security such a crucial issue across Africa, the AAF will make equity finance available for African agricultural companies,”Â said Valentine Chitalu, chairman of the Phatisa Group, which manages the fund. “We welcome all the investors’ significant contributions to Africa’s economic development and long-term prosperity,” Chitalu said (11/29).

“A widespread farming catastrophe could hit Africa if global temperatures rose by four degrees Celsius or more,” according to a study published inÂ the Royal Society’sÂ Philosophical Transactions Journal, SciDev.Net reports.

“In most of southern Africa the growing season could shrink by as much as a fifth, according to scientists at the International Livestock Research Institute (ILRI) in Kenya, who carried out simulation studies based on existing climate change models,” the news service writes, noting that these implications are being considered as negotiations began Monday at the climate change summit in Cancun, Mexico. “According to the models, the growing season may increase modestly in eastern Africa. But cropping seasons are likely to decline more quickly everywhere in the region except central Africa. Much of southern Africa’s rain-fed agriculture could fail every other season by the 2090s, says the study,” SciDev.Net writes. The study “calls for urgent planning for a much warmer future and investment in technology to avert disaster.”

To mitigate damages,Â “ILRI scientists are calling for better monitoring, in particular ‘back to basics’, land-based observation and data collection in Africa, which have been in decline for decades. Information on weather, land use, markets and crop and livestock distribution is critical for an effective response to climate change, they said. ‘Africa’s data-collection systems could be improved with relatively modest additional effort,’ the study says” (Sharma, 11/29).